This is the first is a series of three myth busting blogs tackling flawed arguments in favour of TransCanada’s Energy East project.
TransCanada uses nationalistic rhetoric to drum up support for Energy East
When TransCanada first announced its 4400km Energy East pipeline project from Alberta to Saint John, the spin was all about nation-building.
At their first news conference, CEO Russ Girling compared Energy East to “bold ventures” such as the Canadian Pacific Railway, that evoke civic pride: “Each of these enterprises demanded innovative thinking and a strong belief that building critical infrastructure ties our country together, making us stronger and more in control of our own destiny,” said Girling, as quoted in a Macleans article.
Many pundits and political figures, notably Premier Brad Wall has bought this hook line and sinker.
This spin is dependent on the idea that Energy East will see crude produced in the Prairies replace so-called ‘foreign imports’ to Atlantic Canada.
Myth-busting step 1: Understanding refinery capacity
There are 3 refineries along the Energy East pipeline path:
- Suncor in Montreal with the capacity to refine 137,000 barrels per day (BPD)
- Valero in Quebec City which can refine 235,000 BPD
- Irving in Saint John which can refine 300,000 BPD
If Energy East replaced every drop of oil in these refineries, with a total capacity of 672,000 BPD, a significant 428,000 BPD would still be for export. Energy East would be the largest tar sands pipeline in North America.
But here’s the thing, Energy East won’t replace every drop, far from.
Back in 2014 we helped publish a report finding three projected crude oil supplies along Energy East's path towards 2020:
- Enbridge Line 9 reversal 250,000 BPD
- Atlantic Canada offshore 100,000 BPD
- US light crude 200,000 BPD
Enbridge Line 9 reversal has since been approved and is now is unfortunately flowing oil to Quebec refineries despite fierce community resistance to the old pipe which endanger critical waterways, amongst other critical concerns.
Valero has gone so far as to publicly state it has ‘no firm interest’ in Energy East because it already has commitments for other sources – notably Line 9. Same goes for Suncor.
When it comes to US imports, the fact is it is cheap light crude and a likely ongoing choice given refineries desire for the best bang for their buck.
This leads to the conclusion that 978,000 barrels of the 1.1 million BPD is destined for export.
The report's conclusion is affirmed by TransCanada’s recent filings to the NEB for Energy East indicating the project would see a doubling of oil tanker traffic in the Bay of Fundy up to 281 a year. This means at least 800,000 BPD of Energy East’s crude is destined for international markets.
Not convinced yet? Let’s consider what will be flowing through the pipe. It is a multi-use pipeline which will transport Albertan conventional oil, diluted bitumen and other unconventional oil from the tar sands and Bakken fracked crude from Saskatchewan and the U.S.
The largest and growing portion of this is to be tar sands crude and given the state of refineries in Alberta, it will be unrefined, diluted bitumen. Bitumen produced in the tar sands is becoming increasingly landlocked with pipelines to the West and South being rejected, the high costs of shipping by rail and current export infrastructure nearing its limits.
Outside of the very serious consequences of shipping this toxic mix 4400km to Saint John, the heavy bitumen mixed with light, toxic diluents to flow through the pipe requires special equipment to refine. The three refineries along the route can’t, and don’t appear to have clear plans to invest in the expensive equipment.
Myth-busting step 2: Understanding where crude in Eastern Canada comes from
This argument playing on Canadian patriotic sentiment is often combined with trumped up stats about where Atlantic Canada’s oil currently comes from.
TransCanada consistently states that Eastern Canadian refineries are dependent on oil imports from so-called ‘foreign countries.’ In this promotion piece, they state Eastern Canada imports 634,000 BPD. They go on to source this NEB document stating “Leading importers include Saudi Arabia, Iraq, Norway, Algeria and Angola.” This is an interesting ‘tactic.’ If you look at their source, you can clearly see just over 300,000BPD of this is actually imported from the U.S. not these so-called ‘foreign countries.’
This is consistent with the useful take-down Environmental Defence’s briefing provides comparing TransCanada import numbers to more up to date Statistic Canada’s numbers, concluding, “TransCanada’s claim [that Eastern Canadian refineries import 86% of their oil from ‘foreign imports’] is false. And it’s inaccurate no matter how often the company repeats it. Energy East is an export pipeline, not a made-in-Canada energy solution.”
Further evidence of the extent to which TransCanada bends the truth to frame it’s narrative, the same slick document then goes on to put a price on the imports from these four countries, $8 billion, stating this is enough to cover the, “average annual salary of 15,000 Canadian teachers.”
What utter nonsense.
Not only am I unconvinced Prairies crude flowing in Energy East would displace these crude imports, this is like suggesting the crude flowing through Energy East would be provided for free, allowing these funds to flow to more laudable recipients.
It goes on to say Canada spends 26 billion on oil imports per year and how this is money that could "finance about half of Ontario's entire 2015-2016 healthcare budget," or "pay for New Brunswick's healthcare budget for 10 years." This is misleading, at best.
If this was REALLY about Canadian oil for Canadians...
Like Gordon Laxer argues in his new book, if this was really about a patriotic goal of achieving greater energy security by supplying Canadian oil to Canadians, why aren't we talking about diverting current exports from Newfoundland to the U.S. to meet Atlantic needs?
As Laxer argues, existing production sits around 200,000 BPD which, combined with easy conservation and efficiency measures, can meeting Atlantic Canadian supply - no 4400km pipeline carrying some of the most carbon-intensive and threatening crude to waterways needed.
Coming soon: myth busting the claim that Energy East will reduce oil by rail traffic...